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March 2020

Lecture Notes: The Development of Underdevelopment and W. Arthur Lewis

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The large populations and low levels of material wealth and agricultural productivity in China and India checked the growth of wages. Workers could be cheaply imported and employed at wages not that far above the physical subsistence level. Low wage costs meant that commodities produced in countries open to Asian immigration were relatively cheap. And competition from the Malaysian rubber plantations checked growth and even pushed down wages of the Brazilian rubber tappers as well. The late nineteenth century saw living standards and wage rates become and remain relatively low (although higher than in China and India) throughout the regions that were to come to be called the third world. And as wages in economies that were to become the global periphery were checked, the prospects for having a rich-enough middle class to provide demand for a strong domestic industrial sector ebbed rapidly.

As a result, the chain of causation went thus:

  • The openness of some places where tropical goods could be produced to migration from China and India pushed down their prices in world markets.
  • Low prices in the world markets meant low wages everywhere tropical goods were produced.
  • Low wages meant no prosperous middle-class anywhere tropical goods were produced.
  • No prosperous middle-class meant no mass domestic demand for manufactures.
  • No domestic demand for manufactures meant no chance of starting industrialization.
  • No chance of starting industrialization meant no building a community of engineering practice.
  • No community of engineering practice meant no taking the next step and advancing in industrialization.
  • No advancing in industrialization meant no walking onto the escalator to modernity and prosperity.

That, in a nutshell, is the story of the relative underdevelopment of the global south. It was not that globalization left the global south alone in the years before World War I. It was that globalization put it on a road that made its industrialization more difficult, even though the openness of world markets made it more prosperous in that pre-World war I half century seen rightly as a global El Dorado.

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Lecture Notes: Marx’s Intellectual Journey

3.4) Marx’s Intellectual Journey: 3.4.1. Student and German Hegel-Style Philosopher: Marx started out as an intellectual, an academic, a student at the university in Berlin, trying to become a Hegel-style German philosopher. In 1841 wrote finished a dissertation, The Difference Between the Democritean and Epicurean Philosophy of Nature, analyzing and reanalyzing small differences in how different groups of Greek philosophers in the -4th century understood the foundation of the natural world—an interesting topic, especially considering that next to none of the works of Epicurus survived the decisions of the monks of the middle ages to erase useless documents and reuse the parchment for something else because parchment was then expensive to buy. Demokritos had believed that at bottom nature was “atoms and the void”: individual particles bouncing and clinging to each other in space according to their laws of motion. Epikouros believed that there had to be more: the atoms had to be able to “swerve” to bring, chance, contingency, change, thought, and free will into the universe.

The young German-style philosopher Marx believed that philosophy was the master key to leaving his mark upon the world, because if he could write down the true ideas, they would then teach people how to think correctly about the world, and then people would act correctly and build utopia.

3.4.2. Youth and French-Style Political Activist After finishing his dissertation, Marx concluded that he had been wrong about philosophy being the master key. The world, Marx decided, was controlled not by German-style philosophical thought but by French-style political organization and action. Rather than write abstract treatises about Thought and Being, Marx decided, he needed to write works that would get a wide readership laying out to people the injustices and stupidities of the system, and then organize a mass movement to stage a revolution—like the great French Revolution of 1789-1793—to make a better world, one of equal rights, individual freedom, democracy, the abolition of the feudal system and of slavery.

And so in the early 1840s Marx became a journalist and a political activist. He wrote pro-democracy and pro-liberal articles for the Rhineland News. The Prussian government shut down the Rhineland News at the request of the Czar of Russia. He moved to Paris, and edited and published with his soon to be ex-friend Arnold Ruge a one-issue publication, the French-German Yearbook, the first article of which was Marx’s On the Jewish Question: his first substantial publication. And in Paris Marx met Friedrich Engels, a rich young German whose family owned cotton mills both in Wuppertal, Germany, and Manchester, England.

Marx was certain that he was going to shake the world.

Consider that in 1847 Marx was one of fifteen members of the Communist Correspondence Committee of Brussels, which then decided to merge with the League of the Just—a group with 1000 members, perhaps, half in Paris and half in London. Marx could not afford to travel to London for the joint meeting at which the merger was accomplished. Somehow Friedrich Engels and he managed to wind up with the job of writing down the principles of their movement. And here is how he and Engels then, writing at the end of 1847, introduced their movement of 1015 to the world: here is the opening of the Communist Manifesto:

A spectre is haunting Europe—the spectre of communism. All the powers of old Europe have entered into a holy alliance to exorcise this spectre: Pope and Tsar, Metternich and Guizot, French Radicals and German police-spies. Where is the party in opposition that has not been decried as communistic by its opponents in power? Where is the opposition that has not hurled back the branding reproach of communism, against the more advanced opposition parties, as well as against its reactionary adversaries? Two things result from this fact: I. Communism is already acknowledged by all European powers to be itself a power. II. It is high time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the Spectre of Communism with a manifesto of the party itself…

Grandiose, much? But as best as we can tell, Marx and Engels did not see themselves as running a grift—not even a grift in the sense of exaggerating their powers so as to gain more readers and attention. As best we can tell, they meant every word.

It was after meeting Friedrich Engels—and probably as a result of that friendship and partnership—that Marx turned his attention that in spite of the victories of the great revolution in France and the advances of liberal politics in Britain the conditions of the mass of the people were getting worse, or at least no better: individual freedom, equality under the law, a more-extended voting franchise, the abolition of the feudal system, and so forth did wonderful things for the commercial and manufacturing rich and for the middle classes, but seemed to have no positive impact on the working classes—the mass of the people. Somehow, the workings of the economic system were turning things that ought to advance human freedom and prosperity into their opposite.

3.4.3) Age & British-Style Economist: And so Marx decided, just as he decided earlier that German-style philosophy was going down the wrong track, that French-style political activism for liberal democracy was going down the wrong track. The right track required figuring out how to fix the economy, and that required becoming a British-style political economist. So that was what Marx spent the rest of his life doing: pouring over works of political economy and Parliamentary reports on the condition of England, trying to make his kind of sense of them. The problem was that he was not very good at it. As Paul Samuelson wrote:

From the viewpoint of pure economic theory, Karl Marx can be regarded as a minor post-Ricardian…. Marx… liked a good problem; but he did not labor over a labor theory of value in order to give us moderns scope to use matrix theory on the "transformation" problem. He wanted to have a theory of exploitation, and a basis for his prediction that capitalism would in some sense impoverish the workers and pave the way for revolution into a new stage of society. As the optimism of the American economist Henry Carey shows, a labor theory of value when combined with technological change is, on all but the most extreme assumptions, going to lead to a great increase in real wages and standards of living. So the element of exploitation had to be worked hard….

Technical economics has little to do with Karl Marx's important role in the history of human thought.… Political economy in our sense of the word was the mere cap of Karl Marx's iceberg. Marx’s bold economic or materialistic theory of history, his political theories of the class struggle, his transmutations of Hegelian philosophy have an importance for the historian of “ideas" that far transcends his facade of economics…. A billion people think his ideas are important; and for the historian of thought that fact makes them important...

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Cases and Deaths from Coronavirus Doubling Every Three Days Is Very Bad News Indeed

I confess I am positively unmanned by the every-three-days doubling of reported cases and deaths here in the United States. I had thought that we would see true cases doubling every seven days. And back when reported cases started doubling every three days, I was encouraged, because I thought it meant that we were catching up on testing, and so getting closer to detecting the bulk of the symptomatic cases.

But now it looks like that was wrong: reported cases were doubling every three days because true cases were doubling every three days—that is what deaths tell us was happening to true cases up until three weeks ago. The lack of case curve-bending makes me think that testing is not improving. It makes me think that reported cases are doubling every three days because true cases are doubling every three days.

That means that the Trump administration has only 40% as much time to get its ass in gear as I thought it did.

And that means the chances it will are very very low indeed:


I must confess it had never occurred to me back when China shut down Wuhan that we would simply not test everyone who presented with symptoms—and then backtrace their contacts. It is really looking now as though China—even with its authoritarian blindness fumbling of the intitial response (see Zeynep Tufekci: is going to be studied in the future as a positive model of public health in the 21st century, while the Trump Administration’s reaction—currently on track as the worst in the world in handling coronavirus <>—will be studied in the future as a negative example: Brad DeLong: The Trump Administration’s Epic COVID-19 Failure 'As officials at the US Centers for Disease Control and other public-health bodies surely must have recognized, asymptomatic transmission means that the standard method of quarantining symptomatic travelers when they cross national (or provincial) borders is insufficient. It also means that we have known for almost two months that we were playing a long game against the virus. With its spread more or less inevitable, the primary task was always to reduce the pace of community transmission as much as possible, so that health-care systems would not be overwhelmed before a vaccine could be developed, tested, and deployed. In the long game against a contagious virus, how to mitigate transmission is no secret. In Singapore, which has largely contained the outbreak within its borders, all travelers from abroad have been required to self-quarantine for 14 days, regardless of whether they have symptoms. In Japan, South Korea, and other countries, testing for COVID-19 has been conducted on a massive scale. These are the measures that responsible governments take. You test as many people as you can, and when you locate areas of community transmission, you lock them down. At the same time, you build a database of all those who have already developed immunity and thus may safely resume their normal routine...

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Daily Notes: 2020-03-29

There were 2027 reported deaths in the U.S. from the novel coronavirus as of late on Mar 28—if our reporting systems have not yet broken down.

With a 1% death rate, and with 3 weeks between infection and death, that means that as of Mar 7 there were 202700 coronavirus cases in the United States.

Up through Mar 28 deaths have been doubling every three days, suggesting that before Mar 7 true cases were also doubling every three days:

  1. If that that pace has continued since, by Mar 31 we will have had 8 further doublings: 52 million cases, 1/6 of the population.
  2. If the curve bent to doubling every four days, by Mar 31 we will have had 6 further doublings: 13 million cases, 1/25 of the population, with an additional 30 million cases expected by April 7
  3. If the curve bent to doubling every six days, by Mar 31 we will have had 4 further doublings: 3.2 million cases, 1/100 of the population, with an additional 3.8 million cases expected by April 7
  4. If the curve bent to doubling every eight days, by Mar 31 we will have had 3 further doublings: 1.6 million cases, 1/200 of the population, with an additional 1.5 million cases expected by April 7
  5. If the curve bent to doubling every twelve days, by Mar 31 we will have had 2 further doublings: 800,000 cases, 1/400 of the population, with an additional 600,000 cases expected by April 7
  6. If the curve bent to doubling every twenty-four days, by Mar 31 we will have had 1 further doubling: 400,000 cases, 1/800 of the population, with an additional 200,000 cases expected by April 7

As of the morning of Mar 29, the U.S. had 125,000 reported cases

As of the evening of Mar 28, the U.S. had tested 650,000 people, with a 19% positive rate. Applying that to our six scenarios, in each scenario those we have tested are, respectively, 1, 5, 10, 20, 40, and 80 times more likely to have the disease than the average probability of having the disease.

Question: What is wrong with this analysis?

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Daily Notes: 2020-03-28

Charles Pardee is supposed to have compared making monetary policy by the Federal Reserve Board by driving at high speed a car with its windshield painted black, peering into the rear view mirror for your only information about the road ahead. Because we have no testing, only deaths, that is our situation now. We know that three weeks ago the natural log of cases was increasing by two every week. And we hope that the curve has been powerfully bent since then...

NOTES: U.S. Coronavirus Deaths

  • 2227 deaths as of 2020-03-28
  • 2.001 is the log growth factor over the past week
  • 900,000 is what you get if you project that out over the next three weeks, to April 18:
    • The people who will die on or before Apr 18 will have caught the coronavirus by... now. They are baked in the cake: Unless the curve has already bent, they are toast.
  • 49,000,000 is what you get if you project that out over the next three weeks, to May 2:
    • The people who will die on or before May 2 will have caught the coronavirus by... Easter.
    • That number is too large: that tells us that the epidemic is running its course between now and Easter—unless the curve is bent, or has already been bent, substantially.
    • Our last time to act to stop spread is... now


NOTES: State-by-State Coronavirus

  • Currently 5659 cases and 120 deaths in California: that's 145 reported cases per million—ranking 31st among states in the U.S...
  • If the death rate is 1%, then that means 300 true CA cases per million on Mar 6...
  • If it has been doubling every week, that means about 2400 true cases per million now, and the same number of new cases expected next week...

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Nick Rowe: Relative Supply Shocks, Unobtainium, Walras' Law, and the Coronavirus 'A temporary 100% output cut in 50% of the sectors (what the Coronavirus does) is very different from a 50% output cut in 100% of the sectors (what our intuitions might expect from supply shocks in aggregate macro models).... Here's the intuition.... Unobtainium is a very desirable good.... Someone actually invents a way to produce unobtainium. They can't produce it just yet, but everyone knows they will produce it, and sell it at an affordable price, a few months from now. What happens when they hear the news? Everybody... wants to save up to half their income, so they can spend it on unobtainium in a couple of months time.... That is pretty much what's happening with the Coronavirus, in the real world. Half the goods we used to buy are temporarily unobtainium. But we expect to buy them in a couple of months.... High intertemporal substitution can beat low cross-section substitution.... That's why we need temporarily looser monetary and fiscal policy. (Plus, we also need fiscal policy to redistribute between people differentially affected by the Coronavirus, but that's another story.) Think that's (basically) right...

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Lizzie Burden: Trump’s Crusade to Reopen the Economy ‘May See Extra 5M Deaths’ and a Second Fiscal Bailout 'Economists know the shutdown can’t last forever. As Padhraic Garvey, head of research Americas at ING, said: “Individuals have been told to literally go home because there’s no work for them. They have families to support and at a certain point, the pendulum has to swing back to supporting them.” Nonetheless, there is consensus among economists that there is no trade-off between health and economics—yet. Jonathan Portes... “Immediately we... should be trying to control the health consequences as much as possible. After that, the aim is to make sure that fall in GDP doesn’t have long-term economic damage.... In six months’ time you may ask whether to keep some restrictions at some economic cost because a vaccine might come along, or say we should live with it as long as it’s contained and controlled and just deal with localised outbreaks and accept the negative health consequences. That’d be a reasonable public health debate to have in six months—but not now”...

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Daily Notes: 2020-03-27

NOTES: U.S. Coronavirus Deaths

  • 1696 deaths as of 2020-03-27
  • 1.895 is the log growth factor over the past week
  • 500,000 is what you get if you project that out over the next three weeks, to April 17:
    • The people who will die on or before Apr 17 will have caught the coronavirus by... now. They are baked in the cake: Unless the curve has already bent, they are toast.
  • 22,000,000 is what you get if you project that out over the next three weeks, to May 1:
    • The people who will die on or before May 1 will have caught the coronavirus by... Easter.
    • That number is too large: that tells us that the epidemic is running its course between now and Easter—unless the curve is bent, or has already been bent.
    • Our last time to act to stop spread is... now


NOTES: State-by-State Coronavirus

  • Currently 4791 cases and 106 deaths in California: that's 121 reported cases per million—ranking 31st among states in the U.S...
  • If the death rate is 1%, then that means 265 true CA cases per million on Mar 6...
  • If it has been doubling every week, that means about 2100 true cases per million now, and the same number of new cases expected next week...


  • Currently 46,000 cases and 600 deaths in New York: that's 2400 reported cases per million—ranking 1st among states in the U.S...
  • If the death rate is 1%, then that means 3100 NY cases per million on Mar 6...
  • If it has been doubling every week, that means about 25000 true cases per million now, and the same number of new cases expected next week...

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Comment of the Day: Joe Barsugli 'I agree with Jubilee, but Hunker Down has some problems. While I agree with the broad outline, we simply don't know how much hunkering down is needed to "reach a level that reduces the caseload to what the medical system can currently handle, but should not be pushed far beyond that point." I'm not sure you can fine-tune it. European experience seems to indicate that half-measures are much less than half-effective. Better to hit it hard with all you've got up front and hope you start to see results in 10-12 days. If the current measures prove adequate, then they have to be run for several cycles. China was extreme in its measures and beat the virus back in 6+ weeks. Lightening up too much too soon would lead to a second wave before we are ready to handle it...

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Comment of the Day: Rad Geek 'Rad Geek said in reply to Ebenezer Scrooge: "A really expert journo collects an awful lot of signal with very little added noise, even if the originals are mentally accessible and noise-free .... a general-purpose journo in a specialized beat is trouble, even if the journo is smart and fair. ... A good lawyer or journo can manipulate symbolic knowledge far better than those who have the tacit knowledge..." I don't think we disagree about the features that make a really expert journalist very valuable on a well-defined beat. Sure: and under ordinary conditions in an informational ecosystem, that's sometimes a pretty good reason to read newspaper reports more than you read abstracts, etc. But what I'm concerned about is what happens in extraordinary conditions in the informational ecosystem, when—for example—the sheer volume, rapid-fire turn-around times, and tremendously wide scope of issues involved mean that a lot more "general-purpose" journos are suddenly put onto specialized beats, or onto writing generalist stories that really essentially involve complicated issues from a specialized beat. (Call that the demand-side worry.)...

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Yet Another Rant on Coronavirus & Trump


Could "reopening America for business" on Easter backfire? Oh, yes it could. Oh, it definitely could backfire: BIGTIME.

The experience so far is that, in a society not undertaking social distancing, coronavirus cases double in a little less than five days—grow 100-fold in a month. If, say, the virus has been largely suppressed and only 10000 in the U.S. have it Easter week, then after the u.S. is opened up 1 million will have it on May 15, and then 100 million on June 15, at which point the epidemic will have pretty much run its course. But from May 1 to June 15 hospitals will have been overwhelmed. The likely death rate will have been not 1% but 6%. 5 million additional Americans will have died.

In return we will have produced an extra $1 trillion of stuff.

That's a tradeoff of $200K per life, which is not a good tradeoff to aim at making.

And, while it could be better, it could be much worse...

The right way to do it is to lockdown while we test, test, test, test, test:

  • Test a random-sample panel of 10000 Americans weekly to get a handle on the progress of the disease.
  • Test everyone for antibodies.
  • Let those who have had the disease and so are no immune go back to work—after testing to make sure that they are immune.
    • Indeed, draft those who have recovered to be hospital orderlies and nurses.
  • Make decisions based on knowledge of where the epidemic is in the community, and tune quarantine, social distancing, and shutdown measures to those appropriate given where the epidemic is.

But we do not know where the epidemic is.

And because we are not testing on a sufficient scale, we will not know when and if the virus is truly on the run until a month after the peak, when deaths start dropping. And even then we will not know how much the virus is on the run.

And removing social distancing before the virus is thoroughly on the run means that the virus comes roaring back.

Once the virus is thoroughly on the run, then normal public health measures can handle it:

  • Test, test, test.
  • Test patients presenting with symptoms.
  • Trace and test their contacts. Do what Japan and Singapore did—close to the epicenter in Wuhan, yet still with true caseloads lower than one in ten thousand.
  • Test those crossing borders, symptomatic or not.
  • Test those moving from city to city via air.
  • Test a random sample on the interstates, to see how much virus is leaking from place to place that way.
  • Test a random sample of the population to see whether and how much the disease was established, and then test another one.

Wherever community transmission becomes reestablished, apply the Wuhan lockdown for at least three weeks, so the caseload could be diminished enough so that contact tracing could be resumed.

Build up a database of those who tested positive and are presumably now immune so that they can be on the frontlines of treatment and contact with those possibly newly infected, and reopen the economy by putting them in the jobs that have high human contact and thus high virus transmission rates.

Jim Stock at Harvard has lots of good ideas and has thought a lot about how to do the Hunker Down. He is actually the person I would be asking how to do this—very smart, and has thought hard over the past month about it.

My view, however, is that right now we are scr--ed AF.

It is the end of March. The United States has tested only 500,000 people. There is no nationwide random sample time series. An awful lot of symptomatic people were not tested, and were instead sent back into the community. By the metric of the speed of growth of reported cases since the establishment of the virus dated to the hundredth first-reported case, the U.S. has performed worst of any country: worse than Italy, worse than Spain, worse (we think) than Iran. The 105,000 cases reported as of the evening of Fr Mar 27 are just the tip of the iceberg. From 1700 currently reported deaths so far in the United States, we might guess that there were between 60 and 170 thousand cases active at the start of March, which have grown to between 600 thousand and 2.5 million new cases, with perhaps the same number coming in the next week.

But we really do not know where we are.

We have not imposed the Wuhan lockdown.

If we had imposed the Wuhan lockdown, then three weeks after the lockdown had been imposed, the Hunker Down could start to be relaxed. Then, if we had enough testing capacity, we could start to relax knowing how much and where we could do so without the virus roaring back. Public health could then do its normal job: testing a random sample, testing all those symptomatic, tracing contacts, quarantining, and so keeping the spread slow enough that the health care system is not overwhelmed and that the bulk of the cases come next year or the year after or even later, by which time our virologists will have worked miracles.

But Trump, Mnuchin, Kudlow, & co. appear to want to draw to an inside straight and make the existential bet that transmission will melt away with the coming of spring and the warming up of the country. It might. 10%.

I have not found any economist who will say in private that that is not a very bad idea from a cost-benefit risk point of view.

And then, in two months, we are going to want to restart all the businesses that were functioning as of March 15. Nobody should go bankrupt as a result of anything that happened between March 15 and May 15 this year. That should be the proper goal of economic policy: to create a moment of Jubilee in the middle of this spring.

How would I do it, if I were running economic policy? Medical tests, treatment, tests, food, utilities, plus everything we can do that does not require human-to-human contact within six feet—that should be the extent of our economy for the next three weeks. All else should be shut down. And then, in a month, everyone should go to the job they had on March 15. And if the financing isn't there to run your business on May 15—if you are bankrupt?

That is what the Jubilee is for: the government assumes your debts.

But what if people are worried about the now-higher government debt? That is good reason to impose a highly-progressive tax on income and wealth both to reassure investors that the long-term finances of the government are sound, and to recoup some of the unearned increment that will be captured over the next month by those who turn the lockdown into a source of financial advantage.

That is what the U.S. should do. That is not what the U.S. will do. For one thing, we do not have and are not making enough tests.

With respect to the "China" questions:

  • The U.S. has passed China in reported number of cases.
  • In two weeks, the U.S. is going to pass China in reported coronavirus deaths.
  • Unless China loses (or has already lost control of the virus and is suppressing the news), for the next 50 years China's rulers will say:
    • Our society handled this much better than yours did.
    • Look to us rather than the U.S. for models and as your partners.
  • The U.S. has lost all global leverage over China—unless they are suppressing very bad virus news, and I see only a 10% chance that they are.
  • When the U.S. economy reopens, U.S.-China negotiations are likely to take the form of us saying "please allow us to buy your stuff on whatever terms you offer".

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Someone who wishes me ill sends me this from Niall Ferguson, published on Mar 16. Two weeks from Mar 16 is Mar 30, three days from now. By then the U.S. is likely to have 180,000 reported cases and 3400 coronavirus deaths. I guess the big lesson is: mommas, don't let your kids grow up ignorant of exponentials... Niall Ferguson (2020-03-16): Opinion: The First Coronavirus Error Was Complacency 'In the panic of the pandemic, we are making a lot of category errors.... If the whole of U.S. goes the way of Italy then, adjusting for population, within two weeks there will 95,000 confirmed COVID-19 cases and nearly 7,000 dead...

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Over at Equitable Growth: "Convergence": Daily Focus

Neil Ferguson: UK Has Enough Intensive Care Units For Coronavirus, Expert Predicts '[Neil Ferguson] said the UK should have the testing capacity “within a few weeks” to copy what South Korea has done and aggressively test and trace the general population. New data from the rest of Europe suggests that the outbreak is running faster than expected, said Ferguson. As a result, epidemiologists have revised their estimate of the reproduction number (R0) of the virus. This measure of how many other people a carrier usually infects is now believed to be just over three, he said, up from 2.5. “That adds more evidence to support the more intensive social distancing measures,” he said. His comments come as a team at the University of Oxford released provisional findings of a different model that they say shows that up to half the UK population could already have been infected... It assumes that most people who contract the virus don’t show symptoms and that very few need to go to hospital. “I don’t think that’s consistent with the observed data,” Ferguson told the committee...

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Coronavirus Daily Read List

NEJM Group: Updates on the Covid-19 Pandemic 'From the New England Journal of Medicine, NEJM Journal Watch, NEJM Catalyst, and other trusted sources...

Worldometer: Coronavirus Update (Live)

Financial Times: Coronavirus Tracked

CDPH: nCoV2019 Updates

CDPH: News Releases 2020

Josh Marshall: Epidemic Science & Health Twitter List

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Heather Boushey: The Economist as Anesthetist: Putting the Economy Under and Bringing the Economy Back Up 'In response to the #coronavirus crisis, the nationwide economic shutdown has put the economy “on ice” so that it can be ramped back up after the health crisis is addressed. Concerns about falling into a deep and protracted #coronavirus recession are exacerbated by historically high economic inequality, which makes the United States particularly vulnerable to economic shocks. Policymakers should keep income flowing by helping small businesses pay their bills, ensuring any corporate assistance helps workers, boosting unemployment insurance, and providing #paidleave. The U.S. is one of only three industrialized countries that does not ensure every worker has access to paid time off when they are sick. We also need additional fiscal stimulus to ensure a recession does not turn into a full-scale economic depression. That means direct payments to families and more support for SNAP, Medicaid, and the Children’s Health Insurance Program. We need to remember that the economy isn’t something that happens to us—it’s the direct result of choices that policymakers make. The only entity with the power to mobilize resources and not further exacerbate rising inequality at such a large scale is the government...

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Claudia Sahm, Joel Slemrod, and Matthew Shapiro have the baton on the effects of direct payments to people in cushioning the fall in aggregate demand during a recession. There are good reasons to fear that this supply shock induced recession will be different. But at the moment it is the best we got: Claudia Sahm: 'Research on payments to people in recessions... here are our past papers (with Joel Slemrod [and Matthew Shapiro]): 2008 payments: 2008 payments vs 2009-10 Making Work Pay tax credits: 2011-12 payroll tax cut:

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In a good world, Jim Stock would already be back in the Eisenhower old executive office building chairing the Council of Economic Advisors during this crisis. He is vastly more thoughtful, more confident, and more up to speed on the issues and the trade-offs that we face, economically, during this public health crisis. However, we are not in a good world. We are in a very bad one. Already, the United States his response to the coronavirus is the worst in the world. And it only looks as though the gap between us and other countries is going to grow over the next months: Jim Stock: Coronavirus: Data Gaps and the Policy Response 'Social distancing and business shutdowns... [affect] the case transmission rate β.... [One] policy design question is how to achieve that case transmission rate while minimizing economic cost. A second... is the optimal... β, trading off... economic cost[s]... against... deaths.... [We] lack... data.... Tests have been rationed.... The fraction of tests that are positive do not estimate the population rate of infection.... The COVID-19 asymptomatic rate... estimates in the epidemiological literature range from 0.18 to 0.86. However, the asymptomatic rate could be estimated accurately and quickly by testing a random sample of the overall population. The policy response and its economic consequences hinge critically on the asymptomatic rate. As we illustrate using two policy paths for β, without better knowledge of this knowable parameter, policymakers could make needlessly conservative decisions which would have vast economic costs...

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Let me endorse this as a thoughtful assessment of how important it is to keep the economy from sending anybody a "you are bankrupt: shut down" signal by the economy in this public health crisis. Instead, every business and every workers should be being sent a "you are, at most, on pause: be ready to resume" signal by the economy. How to make sure that signal is sent requires fiscal stimulus an order of magnitude greater than the $2.2 trillion currently in the headlines. For one thing, it requires tolerance of inflation, as prices of medical equipment and necessities rise and as social distancing temporarily reduces productivity elsewhere in the economy: Peter R. Orszag: Social Distancing Makes Sense Only With Huge Fiscal Stimulus 'Mandating social distancing in response to the Covid-19 crisis requires socializing the economic costs of doing so. We as a society can’t reasonably require social distancing, with the massive economic consequences it entails, and believe that most of those costs should be privately borne. We therefore need to either abandon social distancing (thereby overwhelming health systems and sparking untold deaths) or enact much larger stimulus measures. And by much larger I mean far larger even than the eye-popping figures the Trump administration is now pursuing.... The disruption is so vast... that government failure to act will result in an avalanche of bankruptcies and extended unemployment that will, in turn, inflict lasting damage on businesses and families, even after the health crisis passes... not being able to put Humpty Dumpty back together again. It is why government intervention cannot be limited to the sectors most directly affected (airlines and hotels, for example) and must take new forms beyond the conventional tools (such as rebates to individuals). While many existing stimulus measures are necessary and helpful... they are terribly inadequate... The dilemmas we face will continue until an effective anti-viral or therapeutic can be found that allows us to contract the disease without suffering significant harm. In the meantime, even if current efforts are successful at attenuating the spread of the disease over the next several weeks, social distancing will need to be re-imposed in cycles. Given the plausible timetable for developing a vaccine, and unless we get very lucky and the virus itself mutates in a less harmful direction, these cycles could continue for well more than a year.... This is a fiscal risk worth taking.... [To] those who argue that the cost is too high or that a stunning increase in the deficit is too risky [I say:] If you don’t like the fiscal cost but you favor social distancing, what you’re really saying is that you are willing to accept millions of bankruptcies and the ripping apart of corporate and social fabrics across the world.... The economic harm comes mostly from the sudden stop... The demographics of those suffering from coronavirus and those suffering from the economic virus are quite different.... Emmanuel Saez and Gabriel Zucman have proposed that governments simply pay companies to cushion the shock: “In the context of this pandemic, we need a new form of social insurance, one that directly targets and works through businesses,” they wrote earlier this month. “The most direct way to provide this insurance is to have the government act as a buyer of last resort. If the government fully replaces the demand that evaporates, each business can keep paying its workers and maintain its capital stock, as if it was operating under business as usual.” And Andrew Ross Sorkin of the New York Times has suggested a universal loan program, with a zero interest rate and extended repayment terms. One thing is clear about stimulus measures in this crisis: Bigger is better...

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This is by a substantial margin the best thing I have seen on the coronavirus, and where we are with respect to it. My confidence that the Trump administration and the Republican senatorial majority are up to the task of organizing this is too low to measure: Richard Danzig and Marc Lipsitch: Prepare Now for the Long War Against Coronavirus 'It’s essential to clearly envision the problems we’ll face over the next 12 to 18 months and mobilize to respond right away. Here are five priority problems and the actions we should take now.... Minimizing errors and uncertainties about and maximizing confidence in our judgments about cure will soon become as important as present efforts at disease detection. People who recover from Covid-19 probably can work in hospitals, emergency response settings and ordinary jobs without fear of infection.... We need to identify these people and assess how soon after their recovery they become unlikely to infect others.... Assuring that someone has immunity against this new virus requires tests that are distinct from the PCR tests of nose and throat swabs now being used to identify infections. We need to develop and distribute antibody tests.... Problem: If current efforts at social distancing succeed in spacing out infections, we face many months of demand for treatment.... It’s essential to reduce demand for hospitalization by establishing methods to support lengthy treatment at home... telemedicine, house calls by nurse practitioners, on-line instruction for home care-givers, and support for safe travel... the production of enormous quantities of ventilators, personal protective equipment for health care workers and other medical supplies, and to ramp up our capacity for viral testing.... Pervasive illness affecting most of the U.S. population over the course of a year will threaten not just health care systems but other critical infrastructure as well.... People responsible for food production and delivery, power distribution, telecommunication, drinking water, transportation, cyber services and police need to ramp up efforts to protect and maintain these systems, and to detect and report any fragilities and failures. The Defense Department should be engaged to backstop these systems.... It is essential to ensure that the U.S. can hold a national election in November safely, securely and democratically, even if contagion persists and social distancing is still necessary.... This problem might be best addressed by enlisting a private, non-partisan entity (for example, a major foundation) to offer expert advice to Congress and to state and federal officials. With a sense of urgency and more than half a year to plan, voting by mail or via the internet—or other alternatives—could be made to work everywhere.... A long school shutdown and widespread illness will mean missed education, the loss of school nutrition for needy kids, difficulties for teachers separated from their workplace, and psychological effects.... The 50 states can address these issues individually, or they can, more effectively, band together to devise high-quality approaches... We can win... by treating it as both an emergency and a long-term challenge. We are rich, ingenious and resolute enough to prevail. But this virus has already shown we cannot wait until the moment of need to get organized...

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What more can I say, other than that Jonathan Wagner is right?: Jonathan Wagner 'Donald Trump says: At 15 cases: "Within a couple of days, it'll be close to zero". At 9,000 cases: "It's a war. It's a very tough situation". At 46,000 cases: We're safe. Let's reopen America. Are you ready to trust that kind of unstable judgment right now? I'm definitely not...

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As near as I can see, the Trump administration's coronavirus strategy—if it can be said to have a strategy at all—is to dither, doing the very minimum that the public health experts drive it to do well hoping that coronavirus will, like the standard flu, meltaway as the northern hemisphere warms up in the spring. This is a very low odds existential Bette to be making. If anyone has any insight into why they are making it, I would appreciate being dropped a line. Here we have somebody who knows what he is talking about explaining why this is the most draw-to-an-inside-straightish draw to an inside straight: Marc Lipsitch: Seasonality of SARS-CoV-2: Will COVID-19 Go Away on Its Own in Warmer Weather? 'Even seasonal infections can happen “out of season” when they are new. New viruses have a temporary but important advantage—few or no individuals in the population are immune to them.  Old viruses, which have been in the population for longer, operate on a thinner margin—most individuals are immune, and they have to make do with transmitting among the few who aren’t. In simple terms, viruses that have been around for a long time can make a living—spread through the population—only when the conditions are the most favorable, in this case in winter. The consequence is that new viruses—like pandemic influenza—can spread outside the normal season for their longer-established cousins. For example in 2009, the pandemic started in April-May (well outside of flu season), quieted in the summer (perhaps because of the importance of children in transmission of flu), and then rebounded in September-October, before the start of normal flu season. Seasonality does not constrain pandemic viruses the way it does old ones. This pattern is common for flu pandemics. For the novel coronavirus SARS-CoV-2, we have reason to expect that like other betacoronaviruses, it may transmit somewhat more efficiently in winter than summer, though we don’t know the mechanism(s) responsible. The size of the change is expected to be modest, and not enough to stop transmission on its own.  Based on the analogy of pandemic flu, we expect that SARS-CoV-2, as a virus new to humans, will face less immunity and thus transmit more readily even outside of the winter season. Changing seasons and school vacation may help, but are unlikely to stop transmission. Urgent for effective policy is to determine if children are important transmitters, in which case school closures may help slow transmission, or not, in which case resources would be wasted in such closures. Previously it was thought children were not easily infected with SARS-CoV-2. Recent evidence from Shenzhen suggests that children may be infected and shed detectable virus at about the same rate as adults—so now the only question is whether they transmit as readily. It seems likely the answer is yes, but no data as of this writing to my knowledge...

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Not to dunk on atheists—they are as moral as the next (wo)man, and much less likely to do evil things in a belief that some deity commands them. But if one lacks charity and empathy, fear of the LORD might substitute. That, at least, has been the argument for religion as a cement of social order down the ages. So now I have to ask: are all right-wing politicians and writers (save Mitt Romney) confirmed atheists? Certain that this is all here is, so you have to grab all the goodies you can with both hands right now? Is that any way to live?: Kevin Drum: Trump Says Jump; Wingers Ask How High 'Modern conservative politics is remarkable. Two days ago it felt like everyone was totally on board with school closings and quarantines and social distancing. It was the new reality. Then Donald Trump announced that he didn’t really believe the experts after all and wanted to re-open the economy. Within 24 hours I swear that practically every conservative in the country was suddenly in agreement—or seriously considering it at the very least. All Trump had to do was open his mouth to produce a right-wing U-turn so violent you could almost hear the necks snapping. How has Trump done this?...

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The first important question about life in a time of pandemic is: where do you get your information to keep from being overwhelmed and misinformed? Misinformation can and does come from almost everywhere. When Deborah Brix in the White House briefing room says that right now there is no ventilator shortage, many of the reporters in front of her and the watchers on the TV think: “and we can easily produce enough ventilators and distribute them in a timely fashion that there will not be”. That second is an unwarranted inference—something that her political masters want the audience to believe, but that she almost surely does not believe. We put to one side the question: how does she expect to live with herself? The question for us is: how do we parse and understand the flow? Here Rad Geek has some very useful advice: Rad Geek: The Infovore’s Dilemma 'In circumstances that lead to a high risk of groupthink and overreach, it’s a reason to explicitly employ evidential markers when reporting claims; it’s a reason to cite and link to specific sources for specific claims rather than simply repeating them or presenting them as What Experts Are Saying, and it’s a reason for readers to spend some time following links and footnotes where they have been made available, or to significantly discount stories that don’t bother to provide them.... In a high info-garbage environment, it is often worthwhile to deliberately limit, compartmentalize or substitute the consumption of certain kinds of low-quality or risky information. In particular, to restrict your intake of information where the persuasive power of the presentation is especially likely to outrun its real evidential import.... You are almost certainly better off reading the abstract and a paragraph or two of one scientific paper than you are reading through an explainer article attempting to gloss the conclusion of that paper while weaving it together narratively with interviews from two or three other pronouncements by experts in the field. Commentary is prone to be less valuable than reporting, and reporting less valuable than sources or data.... The sources to be most selective about will often be the ones that seem the most appealing from the standpoint of your own social and ideological starting-points. Consume thoughtful discussion and information, not too much, mostly data...

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The Trump Administration’s Epic COVID-19 Failure: Project Syndicate


Project Syndicate: The Trump Administration’s Epic COVID-19 Failure 'Whereas many other countries afflicted by the COVID-19 pandemic have pursued mass testing, quarantines, and other measures to reduce community transmission, the Trump administration has simply dithered. Although America could still shut down for a month to overcome the crisis, the sad truth is that it won't. BERKELEY—Even to US President Donald Trump’s most ardent critics, his administration’s disastrous response to the COVID-19 pandemic has come as a surprise. Who would have guessed that Trump and his cronies would be so incompetent that merely testing for the disease would become a major bottleneck?

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Dealing with Coronavirus: The Hunker Down and the Jubilee


The problem of dealing with the economic policy consequences of the current coronavirus public health emergency is best analyzed in two pieces: the Jubilee, and the Hunker Down.


Bringing the Jubilee

What is the Jubilee? It happens after we have managed to get the virus under control, so that normal public health measures of (1) testing a random panel sample periodically to understand where we are, (2) testing the symptomatic, (3) tracing and testing their contacts, and (4) hospitalizing patients with serious illnesses can manage the situation as best as it can be managed.

Note: I say “managed” rather than eliminated. The extent of asymptomatic transmission means that this disease will not be eliminated. It will become endemic. The task is to delay until our virologists can work their miracles. The task is to delay so that the medical care system is not overwhelmed so that we can keep mortality from the disease at 1% rather than 5% or more.

Once the virus is under control—by June 1, say—we will want every job that existed on February 1 and every business that was running on February 1 to resume. We will want no business to have received a “bankruptcy shut down“ from the market system. We will want no worker to have a received a “you are not wanted“ signal from the market economy.

There is a side constraint on the Jubilee: whatever policies we adopt need to be crafted to minimize unjust enrichment. Perhaps the second biggest economic policy mistake committed by the Obama administration was that its policies to deal with the great recession were both inadequate out of the fear of being perceived to contribute to unjust enrichment, and yet somehow also managed to generate a huge amount of unjust enrichment for the financial sector.


Hunkering Down

Then there is the question of how to manage the Hunker Down. In the Hunker Down, social distancing needs to reach a level that reduces the caseload to what the medical system can currently handle, but should not be pushed far beyond that point. Beyond that point, the benefits of generating a situation in which our ICUs and emergency rooms have excess capacity are low and the costs are high. In the Hunker Down, as many people as possible need to be given financial incentives to move into new productive occupations that provide useful goods and services without disrupting social distance. And in the hunker down, everyone needs to receive the income flow they need to pay their bills.

Managing the Hunker Down and bringing the Jubilee are two separate problems that need to be designed and implemented separately. We need to think about both. We need to keep worries about bringing the Jubilee from damaging our ability to undertake the Hunker Down. We need to keep inplementing the Hunker Down from impairing our power to bring the Jubilee.

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It Looks as Though Very Evil People Named Kudlow, Laffer, and Moore Have Been Telling a Very Stupid President Very Misleading Things

The odds are that some very evil people—I am looking at you, Steve Moore; I am looking at you, Larry Kudlow; I am looking at you, Art Laffer—have been telling a very stupid president very misleading things:

Donald Trump days-behind-new-york-2020-03-25
"[Some states] have virtually no problem or a very small problem..." "We don't have to test an entire state in the Middle West, or wherever they may be..." "A lot of those states could go back right now, and they probably will..."

The only states whose populations are less than 50% urban are Maine, Vermont, West Virginia, and Mississippi. For every case of coronavirus we see, there are likely more than 20 we do not currently see.

West Virginia's five largest cities—Charleston 47,215, Huntington 46,048, Morgantown 30,955, Parkersburg 29,675, Wheeling 26,771—might make it the only state in which they are still free from self-sustaining community transmission.

But probably not.

Probably there are about 200 cases in each of those cities, now spreading. And probably Kentucky, West Virginia, and Puerto Rico are the only states in which coronavirus is more than 15 days behind its pace and prevalence in New York. (Texas, Oklahoma, Kansas, and Virginia I see as most likely much closer to New York in time—they just have not been testing.)

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Louisiana, thanks to Mardi Gras, is now the second most intensive coronavirus hot spot in terms of reported cases (behind NY-NJ) in America. What must it be like being John Bel Edwards right now? Did he not see what was coming when he decided to not cancel Mardi Gras on Feb 25? Or was he scared?:

Office of Governor John Bel Edwards 'On January 11, 2016, John Bel Edwards was sworn in as the 56th Governor of Louisiana. In his first official act, Gov. Edwards signed an executive order to expand Medicaid coverage to 430,000 of the state’s working poor. The decision to expand Medicaid cut Louisiana’s uninsured rate from 24 percent to just 10 percent, saving lives and improving the quality of life for citizens across the state. Gov. Edwards considers this the easiest big decision he’s had to make as Governor...

Mitch Smith & al.: Coronavirus in the U.S.: Latest Map and Case Count 'At the start of March, with large outbreaks already reported on both coasts, officials in Louisiana had not yet identified a single case of the coronavirus. But in the days since, the state has been pummeled. By Tuesday morning, 1,793 Louisianans had been infected and at least 65 had died. "Our trajectory is basically the same as what they had in Italy,” Gov. John Bel Edwards said last week as he restricted public gatherings and urged people to stay inside...

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Comment of the Day: Ronald Brakels: On First Things and R.E. Reno's Mammon-Coronavirus Death Cult 'Not cancelling a small dinner party is exactly the same as refusing to cower under the Nazi heel and allowing the death camps to operate for a generation. Therefore, by imagining having a small dinner party, I personally am as great as Churchill or possibly Jesus of Nazareth. I haven't decided yet. If only they'd had a love child, Jeston of Nazhill...

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Comment of the Day: JEC: On First Things and Its Mammon-Coronavirus Death Cult 'I see a number of lessons to be learned here. Lesson 1: Don't read Twitter. It never ends well. Lesson 2: If your desire to be "interesting" leads you to celebrate an apocalyptic death cult, reconsider your life choices. Lesson 3: If someone invites you to a literal Masque of the Red Death, chain them to an alcove in your basement and wall them up. This is an important public health measure....

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From First Things. R.R. Reno tells us that a "Culture of Life" is all very fine when it comes to bullying women, but not when it begins to interfere in even a minor way with the worship of the true God: Mammon, in the form of a higher value of he DJIA. And I must say, Matthew 25 does not command people to hold dinner parties during a plague so that their guests can infect one another: First Things: "There is a demonic side to the sentimentalism of saving lives at any cost. 'R.R. Reno: "Satan rules a kingdom in which the ultimate power of death is announced morning, noon, and night.... This is what is happening in New York as I write. The media maintain a drumbeat of warnings. And the message is not just that you or I might end up in an overloaded emergency room gasping for air. We are more often reminded that we can communicate the virus to others and cause their deaths.... The mass shutdown of society to fight the spread of COVID-19 creates a perverse, even demonic atmosphere.... We... are collectively required to cower in fear—fear that we’ll die redoubled by the fear that we’ll cause others to die. We are stripped of whatever courage we might be capable of. Were I to host a small dinner party tonight, wanting to resist the paranoia and hysteria, I would be denounced.... Alexander Solzhenitsyn resolutely rejected the materialist principle of “survival at any price.” It strips us of our humanity. This holds true for a judgment about the fate of others as much as it does for ourselves. We must reject the specious moralism that places fear of death at the center of life. Fear of death and causing death is pervasive—stoked by a materialistic view of survival at any price and unchecked by Christian leaders who in all likelihood secretly accept the materialist assumptions of our age. As long as we allow fear to reign, it will cause nearly all believers to fail to do as Christ commands in Matthew 25. It already is..."

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The Trump Administration Has Made America #1: Worst in the World at Coronavirus Response

The trajectory of cases since the 100th reported case is now "ahead" of all other counries. The Trump administration truly has made America #1!


Donald Trump: Coronavirus Statements

Jan. 22: “We have it totally under control.”

Jan. 24: “It will all work out well.”

Jan. 29: “We have the best experts anywhere in the world, and they are on top of it 24/7!”

Jan. 30: “We think we have it very well under control. We have very little problem in this country at this moment—five. And those people are all recuperating successfully."

Feb. 2: “Well, we pretty much shut it down coming in from China."

Feb. 10: “I think the virus is going to be—it’s going to be fine.”

Feb. 14: “We have a very small number of people in the country, right now, with it. It’s like around 12. Many of them are getting better. Some are fully recovered already. So we’re in very good shape.”

Feb. 19: “I think it’s going to work out fine. I think when we get into April, in the warmer weather, that has a very negative effect on that and that type of a virus. So let’s see what happens, but I think it’s going to work out fine.”

Feb. 24: “The Coronavirus is very much under control in the USA.… Stock Market starting to look very good to me!”

Feb. 25: “You may ask about the coronavirus, which is very well under control in our country. We have very few people with it, and the people that have it are... We’re doing a great job.”

Feb. 26: “Because of all we’ve done, the risk to the American people remains very low.… When you have 15 people, and the 15 within a couple of days is going to be down to close to zero. That’s a pretty good job we’ve done."

Feb. 26: "We’re ready for it. It is what it is. We’re ready for it. We’re really prepared."

Feb. 27: “Only a very small number in U.S., and China numbers look to be going down. All countries working well together!”

Feb. 28: “I think it’s really going well. We did something very fortunate: we closed up to certain areas of the world very, very early—far earlier than we were supposed to. I took a lot of heat for doing it. It turned out to be the right move, and we only have 15 people and they are getting better, and hopefully they’re all better. There’s one who is quite sick, but maybe he’s gonna be fine."

Feb. 28: “It’s going to disappear. One day, it’s like a miracle, it will disappear.”

Feb. 29: “We’re the number-one travel destination anywhere in the world, yet we have far fewer cases of the disease than even countries with much less travel or a much smaller population.”

March 4: “Some people will have this at a very light level and won’t even go to a doctor or hospital, and they’ll get better. There are many people like that.”

March 5: “With approximately 100,000 CoronaVirus cases worldwide, and 3,280 deaths, the United States, because of quick action on closing our borders, has, as of now, only 129 cases (40 Americans brought in) and 11 deaths.”

March 6: “Calm. You have to be calm. It’ll go away.”

March 7: “It came out of China, and we heard about it. And made a good move: We closed it down; we stopped it. Otherwise—the head of CDC said last night that you would have thousands of more problems if we didn’t shut it down very early. That was a very early shutdown, which is something we got right."

March 9: “The Fake News Media and their partner, the Democrat Party, is doing everything within its semi-considerable power (it used to be greater!) to inflame the CoronaVirus situation, far beyond what the facts would warrant."

March 9: “So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on. At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths. Think about that!”

March 10: “As you know, it’s about 600 cases, it’s about 26 deaths, within our country. And had we not acted quickly, that number would have been substantially more.”

March 10: “We’re prepared, and we’re doing a great job with it. And it will go away. Just stay calm. It will go away.”

March 11: “I think we’re going to get through it very well.”

March 12: “The United States, because of what I did and what the administration did with China, we have 32 deaths at this point… when you look at the kind of numbers that you’re seeing coming out of other countries, it’s pretty amazing when you think of it.”

March 13: “[FDA] will bring, additionally, 1.4 million tests on board next week and 5 million within a month. I doubt we’ll need anywhere near that.”

March 14: “We’re using the full power of the federal government to defeat the virus, and that’s what we’ve been doing.”

March 15: “This is a very contagious virus. It’s incredible. But it’s something that we have tremendous control over”...

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*Note to Self: Reported Coronavirus Cases per Million (2020-03-22 12:00:00 PDT):

Top 20 States;

NY: 1200
WA: 236
NJ: 215
LA: 182
DC: 145
MI: 89
CO: 82
MA: 77
RI: 75
MS: 69
ME: 68
CT: 62
NV: 61
IL: 59
TN: 55
WI: 55
GA: 48
UT: 43
FL: 40
CA: 40

#coronavirus #notetoself #publichealth #2020-03-22

Comment of the Day: The Trump Administration Has Made America #1: Worst in the World at Coronavirus Response: Ronald Brakels 'Australia's Coronavirus fiscal stimulus is 9.7% of GDP. I think this is the largest peacetime fiscal stimulus by a developed nation. Hopefully, now they are taking the economic effects seriously, the Australian Federal Government will start taking the disease seriously. At least Western Australia and South Australia have islanded themselves, while Tasmania actually is an island. The other three states though... Well, you can walk between them being eaten by a shark, a dingo, or desolation...

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Economic Growth in Historical Comparative Perspective: Assignment 8: Economic Growth in Historical Perspective

Econ 135: Assignment 8: Character of Modern Economic Growth Paper Explain, in about 500 words, how the character of modern economic growth as it has been seen in the world since 1870 differs from economic growth—or not-growth—in previous eras since the invention of agriculture. Upload your short essay to this webpage. Submitting: a text entry box. Due Apr 8 at 11:59pm...

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Lecture Notes: Inequality

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Philosophers, of course, if there are any in the audience here, will have winced by now. Perhaps they will have done more than winced—although I did not see any philosophers rise and run, screaming, from the room.

I have drawn strong conclusions about how high and important a priority reducing inequality should be for making a good society by being a bad philosopher. Philosophers would presumably say that I should first be a good philosopher. They would say that only after having reached good philosophical conclusions should I then use those conclusions as a springboard to derive “oughts” for political economy.

The problem, of course, is that there is no agreement on what the good philosophical conclusions are.

I maintain that my bad philosophy is a very useful middle ground. I draw conclusions for society from it. As you decide on what your view of good philosophy is, you move from my bad philosophy to yours, and that movement will carry with it a move of your political economy conclusions from the baseline I have established to those that you will think best. You will start with my conclusions, and adjust them in light of the difference between my bad and your good moral philosophy. My bad philosophy thus provides you with a convenient basecamp from which you—with your good philosophy—can begin your climb of the mountain of truth...

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Catherine Rampell has good ideas for how the press could do its proper job. Her ideas meet enthusiastic approval: Mistermix: This, This, This 'Catherine Rampell has a few resolutions for the media. This one really hit home: "Don’t spend more time analyzing an idea that the president proposes than he spent coming up with it. This one is hard, I know. Sometimes Trump says things that are just so wrong, in so many ways, that it’s difficult to resist the urge to enumerate all the details of their wrongness. But a 4 a.m. cyberbullying toilet tweet about Kim Jong Un doesn’t necessarily mean there’s an actual, deliberate shift in diplomatic strategy. A blurted parenthetical about how he’d love to pass a middle-class tax cut, the biggest tax cut ever, doesn’t mean he seriously plans to propose such a thing. Let’s not pretend a secret plan actually exists and then conjure up tea leaves for experts to read. Don’t impute more seriousness or thoughtfulness than ad-libbed drivel deserves." Trump’s Twitter feed is like a chicken shit cannon from which the media is constantly trying to make chicken salad. It’s a goddam waste of time and the sooner they find a way to ignore most of it, the better for all of us...

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Jennifer Ouellette: _It’s the Network, Stupid: _ 'Study offers fresh insight into why we’re so divided: social perception bias might simply be an emergent property of our social networks. Eun Lee [and] Fariba Karimi... decided to collaborate on a study of the effect of "homophily"—people's tendency to hang out with those who are similar to them (think "birds of a feather flock together")—on people's perceptions using network models. They came up with a generic binary model dividing individual nodes into two groups: Democrat or Republican, smoking or non-smoking, male or female, immigrants or nonimmigrants, for example. The model treated people as individual nodes in a network, with no consideration of human cognitive processes. The emergence of perception biases depended solely on the relative sizes of the majority and minority groups, and the extent to which like nodes connected to other like nodes...

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Very interesting: whenever "one side of a social divide regards the political system as flawed or illegitimate," then lies become the truth. Those who feel like disrespected outsiders can regard a lying demagogue or their authentic champion. Their authentic appeal is precisely that they delegitimize what their supporters regard as an illegitimate system. Thus Trump's core supporters know full well that he constantly lies, and love it. young is not a bug but a feature: Oliver Hahl, Minjae Kim, Ezra W. Zuckerman Sivan: The Authentic Appeal of the Lying Demagogue: Proclaiming the Deeper Truth about Political Illegitimacy8 'We develop and test a theory to address a puzzling pattern that has been discussed widely since the 2016 U.S. presidential election and reproduced here in a post-election survey: how can a constituency of voters find a candidate “authentically appealing” (i.e., view him positively as authentic) even though he is a “lying demagogue” (someone who deliberately tells lies and appeals to non-normative private prejudices)? Key to the theory are two points: (1) “common-knowledge” lies may be understood as flagrant violations of the norm of truth-telling; and (2) when a political system is suffering from a “crisis of legitimacy” (Lipset 1959) with respect to at least one political constituency, members of that constituency will be motivated to see a flagrant violator of established norms as an authentic champion of its interests. Two online vignette experiments on a simulated college election support our theory. These results demonstrate that mere partisanship is insufficient to explain sharp differences in how lying demagoguery is perceived, and that several oft-discussed factors—information access, culture, language, and gender—are not necessary for explaining such differences. Rather, for the lying demagogue to have authentic appeal, it is sufficient that one side of a social divide regards the political system as flawed or illegitimate...

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Worthy Reads for March 20, 2019

Worthy Reads at Equitable Growth:

  1. Alan Krueger's suicide is horrible and tragic news. All sympathy to his family. He was a light that shone very brightly for good into many dark corners. May his memory be a blessing: Heather Boushey: [Remembrance: Alan Krueger( "We at the Washington Center for Equitable Growth are deeply saddened to learn of the death of Alan Krueger. He was devoted to serving the public and to ensuring that economics was not only about theory but about improving people’s lives.... As a pioneer in the use of natural experiments as the basis for economic research, his work helped create a paradigm shift in the discipline itself.... The lessons learned from the advances in economics in-no-small-part pioneered by Alan underlay much of the cutting edge of economics—and the work we do at Equitable Growth to show how inequality affects economic growth...

  2. I have been waiting for this for a while: it's very good. David R. Howell and Arne L. Kalleberg: Declining Job Quality in the United States: Explanations and Evidence: "We group... explanations... into three broad visions... the competitive market model, in which supply and demand for worker skills in competitive external labor markets generates a single market wage by skill group... contested market models, in which... firms typically have substantial bargaining (monopsony) power; and social-institutional models, which... place greater emphasis on the public policies, formal and informal institutions, and the dynamics of workplace cultures and conflict.... The supply-demand explanation, which has focused on evidence of occupational employment polarization (driven by skill-biased production technologies) and the rise in the college-wage premium.... We conclude by summarizing policy recommendations that follow from each of these visions...

  3. Well worth your time chasing the links from this review of work Equitable Growth has published over the past several years on women's roles. At the root, I think, is that a great many of our economic and societal practices reflect gender reality as it stood 50, 100, or 150 years ago—and both biological and even more societal reality as it stood then was hardly conducive to the empowerment of women. Recall that two centuries ago an overwhelming proportion of women became mothers, that the typical mother stood a one-in-seven chance of dying in childbed, and that the typical mother (if she survived) would spend twenty years eating for two—pregnant or nursing—in a world in which childcare-by-non-relatives was a thing for only the upper class. Legacy institutions from that time are unlikely to serve today's women—or men—well: Equitable Growth: Equitable Growth’s History of Focusing on Women’s Role in the Economy: A Review: "How women are reshaping the American economy.... Gender wage inequality.... Paid family and medical leave.... Women... [and] family economic security.... The gender gap in economics.... The link between bodily autonomy and economic opportunity.... The wages of care.... Motherhood penalties..

  4. The Gap asked researchers to quantify the benefits from offering its employees more regular schedules. The benefits are substantial: Alix Gould-Wirth: Retail workers' Unpredictable Schedules Affect Sleep Quality:: "Retail outlets of The Gap, Inc.... surprising connections between retail workers’ schedules and their sleep patterns.... Joan C. Williams... Susan Lambert... and Saravanan Kesavan.... A novel, multicomponent intervention.... Randomly assigned 19 stores to a treatment group to implement the intervention and nine stores to a control group that did not implement the intervention. The Gap was so committed to increasing the amount of notice workers had of its scheduled shifts that the company extended two components that were originally planned to be part of the intervention—two-weeks advance notice and the elimination of on-call shifts—to all of its workers in North America prior to the beginning of the experiment. So, this experiment tells policymakers and businesses alike how the multicomponent intervention affects workers’ lives beyond advance notice alone..... The intervention made a substantively (and statistically) significant impact on the sleep quality of workers...

  5. And at this I really am crying. There have been a lot of economists behaving very badly indeed in the twenty-six years since I first went to Washington as an adult to start doing economic policy in a serious way. But the late Alan Krueger always behaved well—in communicating with the public, with his colleagues, and with himself. Friend of Equitable Growth Arindrajit Dube puts it best: Arindrajit Dube: "More than any other work,: "More than any other work, Myth and Measurement helped shape my view of building an economics that is open, evidence-driven, and where the core theories can be rejected. Alan Krueger kept reminding us of this, and I won't ever forget it." Alan B. Krueger (May 10, 2018): "Wait. Don’t concede anything. The idea of turning economics into a true empirical science, where core theories can be rejected, is a BIG, revolutionary idea." *Arindrajit Dube (May 10, 2018): "In an empirical science based model of economics, there are fewer 'big thinkers' who dream up of big ideas and more 'plumbers'" Doesn't mean vision and synthesis aren't important, but means knowledge & progress are more emergent than in political economy of 19th/20th century...

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Equitable Growth: 🚨TODAY Fr Mar 20 at 1 pm ET🚨 ': @rooseveltinst @Groundwork @equitablegrowth invite you to a webinar on The Economy During, and After, the Coronavirus: Making Sense of the Moment. @rooseveltinst @Groundwork @equitablegrowth invite you to a webinar on The Economy During, and After, the Coronavirus: Making Sense of the Moment...

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Assignment: Tell Us What Is Happening to You, and What You Wish For

This epidemic is nasty: one case at a Biogen executives meeting on Feb 26-27 spread the virus to 100 of the 200 meeting participants. It kills 15% of people in their 80s who get it, 8% of people in their 70s, 3% of people in their 60s, 1% of people in their 50s, and is like a bad flue to people younger.

One frequently discussed scenario for coronavirus in the United States is that it now infects one in every two thousand people, that its infection rate doubles every week, that attempts at social distancing will fail to impact the spread of the virus, that the virus will not become less virulent as the northern hemisphere warms up, and the virus will infect half the population before herd and natural immunity bring a halt to it spread here in America.

Under this scenario—which is optimistic, in some senses of the word—this virus kills one million people in the United States. Under this scenario, the number of those infected will double for seven more weeks, at which point one in fifteen will be newly infected, and then the spread will slow—but your chances of catching the virus will still be high—for another twelve weeks before the epidemic is over here. That carries us for five months—until the end of July. And in many other scenarios we are dealing with this for longer, even if we manage to flatten the curve or if this virus is seasonal, and so vanishes this summer to come back next winter.

We are moving the university online: to lecture slides with audio, to zoom sessions, to asynchronous email for office hours, and to take home assignments. But there are lots of other things we could provide you and lots of other interactions we could set up, if it would assist you this spring.

Assignment: _Please write at least 250 words—at least one page—telling us what you want us to know about how your life is going right now, and informing us of your views of how we should organize and run this class going forward. Submit it at:

Complete it, please, by 5 pm Fri Mar 20, but late submissions will not be penalized...

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Equitable Growth: In Joint Letter, Equitable Growth Asks Congress to ‘Stanch Economic Bleeding’ in Covid-19 Legislative Package 'Heather Boushey, the president and CEO of the Washington Center for Equitable Growth, along with the leaders of three other Washington-based economic think tanks—the Center for American Progress, the Economic Policy Institute, and the Roosevelt Institute—told U.S. congressional leaders in a letter today that legislation to “stanch the economic bleeding” caused by public health actions to contain the COVID-19 virus must include not only direct cash payments but also substantial increases in programs for families most directly affected as well as other steps to support people, businesses, and the overall U.S. economy. With economic activity across the nation shutting down, the four think tank leaders said that workers, families, and small businesses will continue to suffer significant losses. They need to be compensated to cushion the blow as well as limit the economic impact of the business slowdown. The organizations called for Congress to provide the following: Direct cash payments to provide an economic lifeline to families. Dramatically expanded Unemployment Insurance and Supplemental Nutrition Assistance Program benefits. Emergency actions to stem evictions, address homelessness, and prevent crowding of shelters. Student debt relief to prevent any resources intended to provide economic stimulus from being absorbed by debt servicing of student loans. Financial aid to states, including their health programs, which will be under immense strain as the needs of their residents grow...

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